Stock Analysis

Why Constellation Brands, Inc. (NYSE:STZ) Could Be Worth Watching

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NYSE:STZ
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Let's talk about the popular Constellation Brands, Inc. (NYSE:STZ). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$256 at one point, and dropping to the lows of US$228. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Constellation Brands' current trading price of US$242 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Constellation Brands’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Constellation Brands

What's The Opportunity In Constellation Brands?

Good news, investors! Constellation Brands is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $375.99, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Constellation Brands’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Constellation Brands generate?

earnings-and-revenue-growth
NYSE:STZ Earnings and Revenue Growth January 2nd 2024

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Constellation Brands' earnings over the next few years are expected to increase by 71%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since STZ is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on STZ for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy STZ. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Constellation Brands has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Constellation Brands, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether Constellation Brands is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.